OTTAWA - A new TD Bank report says Canadians should expect to see considerably slower gains in wealth in the next two years, limiting their ability to spend.
The bank report says consumer spending will slow from a more than five per cent annualized rate of increase in early 2008 to about 2.6 per cent in 2009.
Canadians have been able to spend `almost like drunken sailors' over the past two years because high commodity prices have brought great wealth into the country, the bank says.
But most factors point to lower household wealth gains in the next couple of years, including stabilizing commodity prices, lower house price increases and higher unemployment.
The bank said that nominal gross domestic product, which includes inflation, will fall from 5.9 per cent in 2007 to 4.1 per cent this year and 3.5 per cent in 2009.
Real GDP, which adjusts for the impact of inflation, is also slowing from 2.7 per cent in 2007 to one per cent this year, before recovering somewhat to 1.8 per cent in 2009.
